1. ARK Invest Co-Hosts “The B Word” Featuring a Live Conversation with Cathie Wood, Jack Dorsey, and Elon Musk

More than twelve years after its creation, Bitcoin appears to be gaining institutional acceptance. On Wednesday, ARK, Square, Paradigm, and CCI hosted “The B Word”, a Bitcoin-focused initiative aiming to explain how and why institutions can and should embrace Bitcoin and support the network.

Spanning 8 hours and 43 speakers, the virtual conference organized topics into six tracks. Track 1 addressed mainstream narratives about Bitcoin, aiming to debunk the most common Bitcoin myths. Track 2 featured a keynote conversation with Cathie WoodJack Dorsey, and Elon Musk, highlighting Bitcoin as a technology fostering economic empowerment. Track 3 explained the importance of supporting Bitcoin’s open source developer ecosystem. Track 4 detailed why supporting Bitcoin requires understanding and addressing the risks to its security. Track 5 highlighted the importance of educating policymakers about Bitcoin and encouraging sensible regulatory oversight. Finally, Track 6 focused on the importance of preserving the ethos of Bitcoin as institutional interest continues to build.

Please find and enjoy the “The B Word” content here.

We hope “The B Word” will continue to inspire healthy debates about Bitcoin and the important role it is likely to play globally.


2. PacBio Doubles Down on Sequencing Accuracy by Acquiring Omniome

Earlier this week, Pacific Biosciences (PACB), the leading provider of highly accurate long-read sequencing technology, acquired Omniome in a $600 million cash and equity deal. Omniome pioneered a short-read sequencing technology called Sequencing-by-Binding (SBB) that generates sequence data with accuracy more than an order of magnitude greater than the current short-read status quo. This acquisition could cement Pacific Biosciences’ position as the premier provider of high-fidelity solutions for the genomic sequencing market. For those interested in learning more about Omniome’s technology, including the commercial and strategic merits of PacBio’s acquisition, please see the Medium article we published this week.


3. Reportedly, China Is Forcing After-School Tutoring Companies to Shift from For-Profit to Nonprofit Entities

On Friday, Chinese local media and Bloomberg reported that China is considering turning after-school-tutoring (AST) companies into nonprofit entities as part of its “Double Reduction” education policy reforms. “Double Reduction” refers to the load of homework and AST entrance exam preparation that students bear. Since China issued direction for such policy reforms in May, local media has reported on the potential changes, among them prohibiting tutoring during weekends and summer/winter vacations, banning advertising for tutoring services, and establishing a special entity to oversee AST companies. Prior to their plummet on Friday, these reports already had hit Chinese AST stocks by over 50% in some cases.

Among the likely reasons for these reforms are China’s focus on education as a key strategic priority, the excessive workload of tutoring on students, and the rising cost burden on parents, not to mention reportedly corrupt business dealings favoring wealthy families behind the scenes. If implemented, the changes could improve the quality of life for students and lower costs for parents, an increasingly important consideration given China’s demographic concerns and its new three-child policy.

We believe the tradeoffs associated with China’s new policies include the significant cost to existing investors in the AST space which seems to be fomenting more broad-based shareholder fears, and a loss of innovation in the education space. After years of capital flows accruing to its benefit, given these recent moves China could be risking the capital flight of foreigners.


4. Is the Call Center Dying?

Last Sunday, Zoom made headlines when it announced an agreement to acquire cloud call center software provider Five9. Call center software has been a notable exception in the move to broad-based cloud adoption. As of September 2020, only 10% of call centers were in the cloud, according to industry analysts.

The COVID crisis, however, has changed this dynamic and catalyzed call center migration to the cloud. Working from home, agents couldn’t route calls through legacy on-prem software. Indeed, now that many companies have moved permanently to remote or hybrid work policies, the acceleration towards cloud is likely to continue.

Now we wonder if traditional call centers will continue to exist as artificial intelligence automates support tasks? Two trends suggest that they will phase out over time.

The first trend is the move from voice to text as the primary channel of communication with customers. Text-based communication allows support agents to handle requests asynchronously, mitigating connectivity issues in remote work environments and supporting automation more naturally than voice. Moreover, Millennials and Gen Zs seem to prefer text over voice.

The second trend is the automation of support tasks, removing humans from the loop. According to data from Five9, companies spend more than $230 billion annually on call centers, labor accounting for most of the cost. Based on our conversations with industry experts, the annual labor churn rate in call centers is 40%-60% annually, creating powerful economic incentives to automate customer support tasks. Forward-thinking software providers like Twilio and LivePerson are removing humans from the loop and, at the same time, improving customer experience with natural language understanding models that can converse with customers while modeling intent. Unlike the simplistic automated tree menu models we all despise – “Say ‘Pay Bill’ to make a payment” – advanced natural language understanding models gauge intent with surprising accuracy.

While call centers are unlikely to disappear in the next decade, we believe the move to text and automation should reduce support costs significantly as spending shifts from labor to software, improving the customer experience markedly.